Ambrose J:

This was an action for damages for breach of a contract for the sale of 400 tons of light red meranti timber at $220 per ton, fob Singapore, and for return of a deposit.

By the contract, which was in writing and dated 28 April 1960 the defendant agreed to supply the timber to the plaintiffs at the rate of 100 tons per month during June, July and August 1960 and 100 tons between 1 and 20 September 1960.

The allegations in the statement of claim were these. In June 1960 the defendant tendered a parcel of approximately 50 tons of dark red meranti. This was rejected by the plaintiffs. Despite requests made by the plaintiffs, the defendant failed to produce any light red meranti subsequently. By notice in writing dated 29 September 1960 the plaintiffs gave the defendant notice of cancellation of the contract.

The allegations in the defence were these. By the terms of the contract the grading of the timber was to be done by the plaintiffs under the supervision of the Department of Forestry. On or about 9 June 1960 the plaintiffs' manager and grader attended at the defendant's timber yard and graded, accepted and put the plaintiffs' marks on about 10 tons of light red meranti. In June, July, August and September 1960 the defendant repeatedly asked the plaintiffs' agent, Chan Lee Wah, at the defendant's timber yard to send a grader to grade the whole of the 400 tons of light red meranti which was to be supplied by the defendant under the contract. Chan Lee Wah said that he could not find a grader and failed to send a grader. Further the defendant frequently requested Chan Lee Wah to name a ship for delivery of the light red meranti but the plaintiffs failed to do so.

The contract provided that grading was to be done by or under the supervision of the Department of Forestry. In their reply the plaintiffs disputed the point taken by the defendant, that the grading was to be done by the plaintiffs under the supervision of the Department of Forestry. But at the trial they conceded the point.

The other allegations in the reply were these. The plaintiffs' grader graded and marked with their marks about 10 of the 50 tons tendered by the defendant in June 1960. The Department of Forestry examined and certified the 10 tons to be other than light red meranti and refused to approve the grading done by the plaintiffs' grader. The parcel of 50 tons was accordingly rejected by the plaintiffs.

It was not disputed that the defendant informed Chan Lee Wah, the plaintiffs' representative, early in June 1960, that he had about 50 tons of timber as regards the contract for 400 tons.

The plaintiffs' representative, whom I will call Chan, arranged for a grader named Peters to be sent from Kuala Lumpur to Singapore. Chan took Peters to the Forest Department on 13 June 1960 to see Ahmad Kamal, the Timber Officer in charge of the department in Singapore. Peters had to inform the department that he had come to Singapore to do the grading. The department had received on 7 May 1960, a copy of the contract for 400 tons. Peters told Kamal that he would commence grading on 14 June 1960, at the defendant's sawmill.

On 13 June 1960, Kamal instructed Pinto, the Senior Timber Inspector, to keep a close supervision on the work of Peters and report to him. Kamal gave this instruction because Peters had been suspended once in the Federation of Malaya for bad grading.

The first question I considered was whether the parcel of 50 tons tendered by the defendant in June 1960, was entirely light red meranti or whether it included any dark red meranti. Peters started the grading on 14 June 1960. He graded about 10 tons and put the plaintiffs' shipping marks on the timber he was grading and left about 12 noon for lunch. Pinto arrived after Peters had left and met the defendant's foreman. He saw about 15 tons of timber in the timber shed which, in his opinion, could only accommodate 25 tons. He saw no other timber there. He observed that Peters had gra